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University of Michigan-Flint & Delphi Automotive Strategic Report: Motorcycle EMS North American and Western Euro

University of Michigan-Flint & Delphi Automotive Strategic Report: Motorcycle EMS North American and Western European Markets. Nancy Fike, James Redumski, Frank Steiert, Carrie Warning 12/17/03. Presentation Agenda. Project Purpose & Scope Motorcycle Technology EMS Technology

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University of Michigan-Flint & Delphi Automotive Strategic Report: Motorcycle EMS North American and Western Euro

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  1. University of Michigan-Flint & Delphi AutomotiveStrategic Report: Motorcycle EMS North American and Western European Markets Nancy Fike, James Redumski, Frank Steiert, Carrie Warning 12/17/03

  2. Presentation Agenda Project Purpose & Scope Motorcycle Technology EMS Technology Regulation Implications Motorcycle Market Analysis Top Motorcycle OEM’s Proposed Entry Strategy N.Fike, J.Redumski, F.Steiert, C.Warning

  3. Purpose & Scope Carrie Warning

  4. North America Western Europe N.Fike, J.Redumski, F.Steiert, C.Warning

  5. Motorcycle Technology 2-Cycle vs. 4-Cycle Motorcycle Engine Lifespan Jim Redumski

  6. Manufacturing 2-Cycle vs. 4-Cycle Engines • United States • Europe • Indonesia • Japan • China N.Fike, J.Redumski, F.Steiert, C.Warning

  7. TWO-CYCLE • Smaller • Lighter • More Powerful • Less Expensive • Less Motion FOUR-CYCLE • Emission Standards • Carbon Monoxide • Hydrocarbon • U.S. • Europe N.Fike, J.Redumski, F.Steiert, C.Warning

  8. Honda • New Technology • The EXP-2 • Completely burns fuel • Valve Positioning • Pressurized Auto Ignite N.Fike, J.Redumski, F.Steiert, C.Warning

  9. Motorcycle Engine Lifespan • Factors in Engine Wear • Two Research Studies • Cycle Trend • California Government • Hours of Usage per Year N.Fike, J.Redumski, F.Steiert, C.Warning

  10. EMS Technology EMS Function Open Loop vs. Closed Loop Control System Needs Regulations EMS Advantages & Disadvantages Frank Steiert

  11. EMS Function • Controls the engine and defines the performance and uniqueness of each motorcycle brand • Comprised of an ECU, software, calibrations, input sensors, and output devices. • Required to meet current and future emission regulations • May be either Open-Loop or Closed-Loop N.Fike, J.Redumski, F.Steiert, C.Warning

  12. Open Loop vs. Closed Loop • Open-Loop systems do not have any feedback mechanism (static) • Closed-Loop systems have feedback that allow the EMS to react (dynamic) to changes in the exhaust gas • Closed-Loop systems incorporate an Oxygen sensor as its feedback mechanism • The ECU modifies the amount of fuel injected based on the O2 sensor feedback N.Fike, J.Redumski, F.Steiert, C.Warning

  13. Control System Needs N.Fike, J.Redumski, F.Steiert, C.Warning

  14. Regulations European Emissions California Emissions (ARB) Federal Emissions (EPA) Noise - North America & Europe

  15. European Emissions N.Fike, J.Redumski, F.Steiert, C.Warning

  16. California Emissions (ARB) N.Fike, J.Redumski, F.Steiert, C.Warning

  17. Federal Emissions (EPA) N.Fike, J.Redumski, F.Steiert, C.Warning

  18. Noise - North America & Europe • North America (EPA): • Current EPA regulation is 80 dBA, established 1982 • Europe: N.Fike, J.Redumski, F.Steiert, C.Warning

  19. EMS Advantages & Disadvantages Advantages: • Increased performance & improved drivability • Reduced emissions • On-board diagnostics (improved serviceability) • Improved relationship with Environmentalists Disadvantages: • Cost (development, purchase, warranty) • Less owner customization & maintenance • Opportunity for more governmental regulations • Increased motorcycle complexity N.Fike, J.Redumski, F.Steiert, C.Warning

  20. Motorcycle Industry Demographic Market Trends Motorcycle Market Analysis Carrie Warning

  21. Demographic Market Trends • Male • 45 years old • Married • No children • Educated • $78,000 per year N.Fike, J.Redumski, F.Steiert, C.Warning

  22. Motorcycle Market Analysis (NA) • Class III • 90% of sales • 75% are 700 cc or greater • 1% annual growth (2010) • Top 6 OEMs • 95.3% market share N.Fike, J.Redumski, F.Steiert, C.Warning

  23. Motorcycle Market Analysis (EU) • 2002 • Registration  3.3% • Volume 1.325M units • 2004 - 2007 forecast • 2.5%  • 1.416M units (2007) • Top 5 OEMs • 77.1% market share • Italy • 29.5% of EU sales N.Fike, J.Redumski, F.Steiert, C.Warning

  24. Motorcycle OEMs Major OEMs Motorcycle Segment OEM Highlights Market Share Nancy Fike

  25. Major OEMs • Harley-Davidson • Honda Motor Co., Ltd. • Suzuki Motor Corporation • Yamaha Motor Co., Ltd. • Kawasaki Heavy Industries • BMW N.Fike, J.Redumski, F.Steiert, C.Warning

  26. Harley-Davidson, Inc. • Known as the “Motor Company” • Only major U.S. motorcycle manufacturer • #1 U.S. seller of heavyweight motorcycles • Invested $1.5 billion over last 7 years to ensure market leader position • Moved into new European headquarters during 2002 N.Fike, J.Redumski, F.Steiert, C.Warning

  27. Honda Motor Co., Ltd. • World’s largest motorcycle producer • Japan’s #3 automaker • World leader manufacturer of internal combustion engines • Operates 110 factories in 31 countries • CY2005-plans to reduce total hydrocarbon emissions to 1/3 of ’95 levels • CY2005-plans to improve average fuel efficiency by 30% relative to ’95 levels N.Fike, J.Redumski, F.Steiert, C.Warning

  28. Suzuki Motor Corporation • Japan’s #1 minicar producer • Japan’s #3 motorcycle manufacturer • Operates in 190 countries • Partnership w/ Kawasaki to develop motorcycles and ATV’s • Developing technology to reduce emission gases, improve fuel economy, and reduce noise N.Fike, J.Redumski, F.Steiert, C.Warning

  29. Yamaha Motor Co., Ltd. • Best known for extensive line of motorcycles • Operates 60 plants in 35 countries • Made efforts to meet strict CO2 emission regulations, but failed N.Fike, J.Redumski, F.Steiert, C.Warning

  30. Kawasaki Heavy Industries, Ltd. • Multitude of products • Difficult to find motorcycle specific information N.Fike, J.Redumski, F.Steiert, C.Warning

  31. BMW • One of Europe’s top automakers • Currently expanding R&D facilities and staff • Engineering & Emissions Control Test Center • Represented in 130 countries N.Fike, J.Redumski, F.Steiert, C.Warning

  32. Summary of Major OEMs

  33. OEM Research & Development Costs

  34. 2002 U.S. Motorcycle Market OEMs 2.5% 4.6% 7.1% 9.3% 46.4% 9.8% 20.2% Top 6 OEMs hold 95.3% of Motorcycle Market 7

  35. 2002 Europe Motorcycle Market OEMs 7.0% 3.5% 5.7% 21.0% 6.6% 8.5% 17.7% 14.8% 15.1% Top 5 OEMs hold 77.1% of Motorcycle Market 8

  36. Proposed Entry Strategy Competitive Market SWOT Analysis Strategic Options Strategic Recommendations Frank Steiert

  37. Competitive Market • Many established EMS Suppliers • OEMs and EMS Suppliers build strong relationships (due to length and complexity of EMS projects) • EMS is considered by many OEMs to be a core competency (internal expertise) • A new EMS Supplier must have technically superior systems and competitive prices N.Fike, J.Redumski, F.Steiert, C.Warning

  38. SWOT Analysis - Delphi

  39. Strategic Options • Offer EMS to high-volume OEMs with non-automotive divisions • Offer EMS to high-volume OEMs with automotive divisions • Offer generic EMS with tools to low-volume custom motorcycle manufacturers • Offer EMS components to OEMs N.Fike, J.Redumski, F.Steiert, C.Warning

  40. Strategic Recommendations • Offer EMS to high-volume OEMs with non-automotive divisions • Offer EMS to high-volume OEMs with automotive divisions • Offer generic EMS with tools to low-volume custom motorcycle manufacturers • Offer EMS components to OEMs N.Fike, J.Redumski, F.Steiert, C.Warning

  41. Questions & Answers TEAM

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